An Economic Hit Man Speaks Out: John Perkins on How Greece Has Fallen Victim to "Economic Hit Men"

By Michael Nevradakis, interviewing John Perkins

TRuth-out

Saturday, Sep 13, 2014

Editorial
comment: John Perkins, the former 'economic hit man' explains how we are being manipulated by the vultures in the world we
live in. Not only about Greece, but about Ecuador and Rafael Correa,
Europe, IMF, foreclosures on houses and the entire absurd world of
Corporatocracy that we live in. - SON

"My sin was ripping off people around the world," said John Perkins, author of "Confessions of an Economic Hit Man," at Transitions Bookplace in Chicago, on February 3, 2006. (Photo: Peter Thompson / The New York Times)

John Perkins, author of Confessions of an Economic Hit Man, discusses how Greece and other eurozone countries have become the new victims of "economic hit men."

John Perkins is no
stranger to making confessions. His well-known book, 'Confessions of an
Economic Hit Man', revealed how international organizations such as the
International Monetary Fund (IMF) and the World Bank, while publicly
professing to "save" suffering countries and economies, instead pull a
bait-and-switch on their governments: promising startling growth,
gleaming new infrastructure projects and a future of economic prosperity
- all of which would occur if those countries borrow huge loans from
those organizations. Far from achieving runaway economic growth and
success, however, these countries instead fall victim to a crippling and
unsustainable debt burden.

That's where the "economic hit men" come in: seemingly ordinary men,
with ordinary backgrounds, who travel to these countries and impose the
harsh austerity policies prescribed by the IMF and World Bank as
"solutions" to the economic hardship they are now experiencing. Men like
Perkins were trained to squeeze every last drop of wealth and resources
from these sputtering economies, and continue to do so to this day. In
this interview, which aired on Dialogos Radio, Perkins talks about how Greece and the eurozone have become the new victims of such "economic hit men."

I have to say that Correa has had some real setbacks since then . . . he, like so many presidents, has to be aware that if you stand up too strongly against the system, if the economic hit men are not happy, if they don't get their way, then the jackals will come in and assassinate you or overthrow you in a coup. There was an attempted coup against him; there was a successful coup in a country not too far away from him, Honduras, because these presidents stood up.

Michael Nevradakis: In your book, you write about how you
were, for many years, a so-called "economic hit man." Who are these
economic hit men, and what do they do?

John Perkins: Essentially, my job was to identify
countries that had resources that our corporations want, and that could
be things like oil - or it could be markets - it could be transportation
systems. There're so many different things. Once we identified these
countries, we arranged huge loans to them, but the money would never
actually go to the countries; instead it would go to our own
corporations to build infrastructure projects in those countries, things
like power plants and highways that benefitted a few wealthy people as
well as our own corporations, but not the majority of people who
couldn't afford to buy into these things, and yet they were left holding
a huge debt, very much like what Greece has today, a phenomenal debt.

And once [they were] bound by that debt, we would go back, usually in
the form of the IMF - and in the case of Greece today, it's the IMF and
the EU [European Union] - and make tremendous demands on the country:
increase taxes, cut back on spending, sell public sector utilities to
private companies, things like power companies and water systems,
transportation systems, privatize those, and basically become a slave to
us, to the corporations, to the IMF, in your case to the EU, and
basically, organizations like the World Bank, the IMF, the EU, are tools
of the big corporations, what I call the "corporatocracy."

And before turning specifically to the case of Greece, let's
talk a little bit more about the manner in which these economic hit men
and these organizations like the IMF operate. You mentioned, of course,
how they go in and they work to get these countries into massive debt,
that money goes in and then goes straight back out. You also mentioned
in your book these overly optimistic growth forecasts that are sold to
the politicians of these countries but which really have no resemblance
to reality.

Exactly, we'd show that if these investments were made in things like
electric energy systems that the economy would grow at phenomenally
high rates. The fact of the matter is, when you invest in these big
infrastructure projects, you do see economic growth, however, most of
that growth reflects the wealthy getting wealthier and wealthier; it
doesn't reflect the majority of the people, and we're seeing that in the
United States today.

For example, where we can show economic growth, growth in the GDP,
but at the same time unemployment may be going up or staying level, and
foreclosures on houses may be going up or staying stable. These numbers
tend to reflect the very wealthy, since they have a huge percentage of
the economy, statistically speaking. Nevertheless, we would show that
when you invest in these infrastructure projects, your economy does
grow, and yet, we would even show it growing much faster than it ever
conceivably would, and that was only used to justify these horrendous,
incredibly debilitating loans.

Is there a common theme with respect to the countries
typically targeted? Are they, for instance, rich in resources or do they
typically possess some other strategic importance to the powers that
be?

Yes, all of those. Resources can take many different forms: One is
the material resources like minerals or oil; another resource is
strategic location; another resource is a big marketplace or cheap
labor. So, different countries make different requirements. I think what
we're seeing in Europe today isn't any different, and that includes
Greece.

What happens once these countries that are targeted are
indebted? How do these major powers, these economic hit men, these
international organizations come back and get their "pound of flesh," if
you will, from the countries that are heavily in debt?

By insisting that the countries adopt policies that will sell their
publicly owned utility companies, water and sewage systems, maybe
schools, transportation systems, even jails, to the big corporations.
Privatize, privatize. Allow us to build military bases on their soil.
Many things can be done, but basically, they become servants to what I
call the corporatocracy. You have to remember that today we have a
global empire, and it's not an American empire. It's not a national
empire. It doesn't help the American people very much. It's a corporate
empire, and the big corporations rule. They control the politics of the
United States, and to a large degree they control a great deal of the
policies of countries like China, around the world.

John, looking specifically now at the case of Greece, of
course you mentioned your belief that the country has become the victim
of economic hit men and these international organizations . . . what was
your reaction when you first heard about the crisis in Greece and the
measures that were to be implemented in the country?

I've been following Greece for a long time. I was on Greek
television. A Greek film company did a documentary called "Apology of an
Economic Hit Man," and I also spent a lot of time in Iceland and in
Ireland. I was invited to Iceland to help encourage the people there to
vote on a referendum not to repay their debts, and I did that and
encouraged them not to, and they did vote no, and as a result, Iceland
is doing quite well now economically compared to the rest of Europe.
Ireland, on the other hand: I tried to do the same thing there, but the
Irish people apparently voted against the referendum, though there's
been many reports that there was a lot of corruption.

In the case of Greece, my reaction was that "Greece is being hit."
There's no question about it. Sure, Greece made mistakes, your leaders
made some mistakes, but the people didn't really make the mistakes, and
now the people are being asked to pay for the mistakes made by their
leaders, often in cahoots with the big banks. So, people make tremendous
amounts of money off of these so-called "mistakes," and now, the people
who didn't make the mistakes are being asked to pay the price. That's
consistent around the world: We've seen it in Latin America. We've seen
it in Asia. We've seen it in so many places around the world.

This leads directly to the next question I had: From my
observation, at least in Greece, the crisis has been accompanied by an
increase in self-blame or self-loathing; there's this sentiment in
Greece that many people have that the country failed, that the people
failed . . . there's hardly even protest in Greece anymore, and of
course there's a huge "brain drain" - there's a lot of people that are
leaving the country. Does this all seem familiar to you when comparing
to other countries in which you've had personal experience?

Sure, that's part of the game: convince people that they're wrong,
that they're inferior. The corporatocracy is incredibly good at that,
whether it is back during the Vietnam War, convincing the world that the
North Vietnamese were evil; today it's the Muslims. It's a policy of
them versus us: We are good. We are right. We do everything right.
You're wrong. And in this case, all of this energy has been directed at
the Greek people to say "you're lazy; you didn't do the right thing; you
didn't follow the right policies," when in actuality, an awful lot of
the blame needs to be laid on the financial community that encouraged
Greece to go down this route. And I would say that we have something
very similar going on in the United States, where people here are being
led to believe that because their house is being foreclosed that they
were stupid, that they bought the wrong houses; they overspent
themselves.

The fact of the matter is their bankers told them to do this, and
around the world, we've come to trust bankers - or we used to. In the
United States, we never believed that a banker would tell us to buy a
$500,000 house if in fact we could really only afford a $300,000 house.
We thought it was in the bank's interest not to foreclose. But that
changed a few years ago, and bankers told people who they knew could
only afford a $300,000 house to buy a $500,000 house.

"Tighten your belt, in a few years that house will be worth a million
dollars; you'll make a lot of money" . . . in fact, the value of the
house went down; the market dropped out; the banks foreclosed on these
houses, repackaged them, and sold them again. Double whammy. The people
were told, "you were stupid; you were greedy; why did you buy such an
expensive house?" But in actuality, the bankers told them to do this,
and we've grown up to believe that we can trust our bankers. Something
very similar on a larger scale happened in so many countries around the
world, including Greece.

In Greece, the traditional major political parties are, of
course, overwhelmingly in favor of the harsh austerity measures that
have been imposed, but also we see that the major business and media
interests are also overwhelmingly in support. Does this surprise you in
the slightest?

No, it doesn't surprise me and yet it's ridiculous because austerity
does not work. We've proven that time and time again, and perhaps the
greatest proof was the opposite, in the United States during the Great
Depression, when President Roosevelt initiated all these policies to put
people back to work, to pump money into the economy. That's what works.
We know that austerity does not work in these situations.

We also have to understand that, in the United States for example,
over the past 40 years, the middle class has been on the decline on a
real dollar basis, while the economy has been increasing. In fact,
that's pretty much happened around the world. Globally, the middle class
has been in decline. Big business needs to recognize - it hasn't yet,
but it needs to recognize - that that serves nobody's long-term
interest, that the middle class is the market. And if the middle class
continues to be in decline, whether it's in Greece or the United States
or globally, ultimately businesses will pay the price; they won't have
customers. Henry Ford once said: "I want to pay all my workers enough
money so they can go out and buy Ford cars." That's a very good policy.
That's wise. This austerity program moves in the opposite direction and
it's a foolish policy.

In your book, which was written in 2004, you expressed hope
that the euro would serve as a counterweight to American global
hegemony, to the hegemony of the US dollar. Did you ever expect that we
would see in the European Union what we are seeing today, with austerity
that is not just in Greece but also in Spain, Portugal, Ireland, Italy,
and also several other countries as well?

What I didn't realize during any of this period was how much
corporatocracy does not want a united Europe. We need to understand
this. They may be happy enough with the euro, with one currency - they
are happy to a certain degree by having it united enough that markets
are open - but they do not want standardized rules and regulations.
Let's face it, big corporations, the corporatocracy, take advantage of
the fact that some countries in Europe have much more lenient tax laws,
some have much more lenient environmental and social laws, and they can
pit them against each other.

What would it be like for big corporations if they didn't have their
tax havens in places like Malta or other places? I think we need to
recognize that what the corporatocracy saw at first, the solid euro, a
European union seemed like a very good thing, but as it moved forward,
they could see that what was going to happen was that social and
environmental laws and regulations were going to be standardized. They
didn't want that, so to a certain degree what's been going on in Europe
has been because the corporatocracy wants Europe to fail, at least on a
certain level.

You wrote about the examples of Ecuador and other countries,
which after the collapse of oil prices in the late '80s found themselves
with huge debts and this, of course, led to massive austerity measures .
. . sounds all very similar to what we are now seeing in Greece. How
did the people of Ecuador and other countries that found themselves in
similar situations eventually resist?

Ecuador elected a pretty remarkable president, Rafael Correa, who has
a PhD in economics from a United States university. He understands the
system, and he understood that Ecuador took on these debts back when I
was an economic hit man and the country was ruled by a military junta
that was under the control of the CIA and the US. That junta took on
these huge debts, put Ecuador in deep debt; the people didn't agree to
that. When Rafael Correa was democratically elected, he immediately
said, "We're not paying these debts; the people did not take on these
debts; maybe the IMF should pay the debts and maybe the junta, which of
course was long gone - moved to Miami or someplace - should pay the
debts, maybe John Perkins and the other economic hit men should pay the
debts, but the people shouldn't."

And since then, he's been renegotiating and bringing the debts way
down and saying, "We might be willing to pay some of them." That was a
very smart move; it reflected similar things that had been done at
different times in places like Brazil and Argentina, and more recently,
following that model, Iceland, with great success. I have to say that
Correa has had some real setbacks since then . . . he, like so many
presidents, has to be aware that if you stand up too strongly against
the system, if the economic hit men are not happy, if they don't get
their way, then the jackals will come in and assassinate you or
overthrow you in a coup. There was an attempted coup against him; there
was a successful coup in a country not too far away from him, Honduras,
because these presidents stood up.

We have to realize that these presidents are in very, very vulnerable
positions, and ultimately we the people have to stand up, because
leaders can only do a certain amount. Today, in many places, leaders are
not just vulnerable; it doesn't take a bullet to bring down a leader
anymore. A scandal - a sex scandal, a drug scandal - can bring down a
leader. We saw that happen to Bill Clinton, to Strauss-Kahn of the IMF;
we've seen it happen a number of times. These leaders are very aware
that they are in very vulnerable positions: If they stand up or go
against the status quo too strongly, they're going to be taken out, one
way or another. They're aware of that, and it behooves we the people to
really stand up for our own rights.

You mentioned the recent example of Iceland . . . other than
the referendum that was held, what other measures did the country adopt
to get out of this spiral of austerity and to return to growth and to a
much more positive outlook for the country?

It's been investing money in programs that put people back to work
and it's also been putting on trial some of the bankers that caused the
problems, which has been a big uplift in terms of morale for the people.
So Iceland has launched some programs that say "No, we're not going to
go into austerity; we're not going to pay back these loans; we're going
to put the money into putting people back to work," and ultimately
that's what drives an economy, people working. If you've got high
unemployment, like you do in Greece today, extremely high unemployment,
the country's always going to be in trouble. You've got to bring down
that unemployment, you've got to hire people. It's so important to put
people back to work. Your unemployment is about 28 percent; it's
staggering, and disposable income has dropped 40 percent and it's going
to continue to drop if you have high unemployment. So, the important
thing for an economy is to get the employment up and get disposable
income back up, so that people will invest in their country and in goods
and services.

In closing, what message would you like to share with the
people of Greece, as they continue to experience and to live through the
very harsh results of the austerity policies that have been implemented
in the country for the past three years?

I want to draw upon Greece's history. You're a proud, strong country,
a country of warriors. The mythology of the warrior to some degree
comes out of Greece, and so does democracy! And to realize that the
marketplace is a democracy today, and how we spend our money is casting
our ballot. Most political democracies are corrupt, including that of
the United States. Democracy is not really working on a governmental
basis because the corporations are in charge. But it is working on a
market basis. I would encourage the people of Greece to stand up: Don't
pay off those debts; have your own referendums; refuse to pay them off;
go to the streets and strike.

And so, I would encourage the Greek people to continue to do this.
Don't accept this criticism that it's your fault, you're to blame,
you've got to suffer austerity, austerity, austerity. That only works
for the rich people; it does not work for the average person or the
middle class. Build up that middle class; bring employment back; bring
disposable income back to the average citizen of Greece. Fight for that;
make it happen; stand up for your rights; respect your history as
fighters and leaders in democracy, and show the world!